Warburg Pincus-Owned GT Nexus Explores Sale — Sources

Dana Mattioli and Gillian Tan were first to report that GT Nexus Inc. is exploring a sale. Morgan Stanley has been hired to explore options for GT Nexus that could include a sale or initial public offering. In a sale, GT Nexus is likely to be valued at more than $800 million, according to a source.

GT Nexus Inc. is exploring a sale, in what would be the latest deal for a so-called cloud-computing company.

Morgan Stanley has been hired to explore options for GT Nexus that could include a sale or initial public offering, according to people familiar with the matter. In a sale, GT Nexus is likely to be valued at more than $800 million–the price at which it recently received a bid, according to one of the people.

GT Nexus uses the cloud–a way to store data on remote servers–for supply-chain management. GT Nexus counts more than 25,000 businesses across industries such as retail, manufacturing and banking as clients, according to its website. They include Adidas AG, Caterpillar Inc. and Pfizer Inc. Warburg Pincus invested in the Oakland, Calif., company in 1999.

Earlier this year, German software giant SAP SE offered to buy GT Nexus for around $800 million, the people said. The deal didn’t materialize then and SAP in September agreed to buy Concur Technologies Inc., which does cloud-based travel-expense management, for more than $8 billion.

GT Nexus’s products allow companies to get real-time updates on their supply chain and inventory management. In industries like retail, inventory management can make or break a company, especially in peak selling periods such as the Christmas holiday. Increasingly, companies are investing in supply-chain management to decrease the time it takes to get products onto store shelves, or in people’s homes in the case of ecommerce, and to quickly restock items to meet demand.

Technology companies are pouring sizeable sums into developing cloud-computing software and tools, or into acquiring rivals with such expertise. Google Inc.,
Amazon.com Inc. and Microsoft Corp. are spending $1 billion to $2 billion a quarter to build data centers and acquire the necessary real estate, on top of billions more in research and development each year on the effort. Hewlett-Packard Co. said in May it would invest more than $1 billion over the next two years on cloud technology, a move it says is necessary to ward off competition even if it means cannibalizing its legacy hardware and software
businesses. International Business Machines Corp. and Cisco Systems Inc. have
also touted aggressive efforts to move further into the cloud.

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